What is day trading?

Day trading means buying and selling the same stock within one day without holding overnight. It is fast, costly and high-risk.

Updated：2026-11-15

What it is

Day trading (same-day round trip) means buying and then selling the same stock within one trading day (or selling first and buying back), closing the position that day instead of holding it overnight.

Types

• Buy first, sell later: buy during the day and sell.
• Sell first, buy later: sell first by borrowing shares or on margin, then buy back; eligibility is required.
• Which methods you can use, the eligibility and the risk disclosures follow the exchange and your broker.

Why it is high-risk

• High trading costs: many trades make fees and taxes add up fast; day trading has its own transaction tax treatment, whose conditions and duration follow the regulator’s announcements.
• Fast moves: prices change quickly during the session and slow reactions can cause losses.
• Leverage and margin: combined with margin trading, losses are magnified (see “What are margin buying and short selling?”).
• Emotion: frequent trading makes judgement easily swayed by short-term swings.

Day-trading ratio

The day-trading ratio is a stock’s day-trading volume as a share of its total volume that day, showing how much of the day’s trading was day trading. It describes trades that already happened and does not indicate direction.

On this site

The Chips tab of a stock page has its day-trading data.

This article only explains terms and risks. Tenmizu does not provide investment recommendations and this is not investment advice.